Inside Donald Trump's disastrous week in the South China Sea

Vietnam’s history is full of heroic tales of resistance to China.
But this month Hanoi bent the knee to Beijing, humiliated in a
contest over who controls the South China Sea, the most disputed
waterway in the world.

Hanoi has been looking to Washington for implicit backing to see
off Beijing’s threats.

At the same time, the Trump administration demonstrated that it
either does not understand or sufficiently care about the
interests of its friends and potential partners in Southeast Asia
to protect them against China.

Southeast Asian governments will conclude that the United States
does not have their backs. And while Washington eats itself over
Russian spies and health care debates, one of the world’s most
crucial regions is slipping into Beijing’s hands.

There’s no tenser set of waters in the world than the South China
Sea. For the last few years, China and its neighbors have been
bluffing, threatening, cajoling, and suing for control of its
resources. In June, Vietnam made an assertive move. After two and
a half years of delay, it finally granted Talisman Vietnam (a
subsidiary of the Spanish energy firm Repsol) permission to drill
for gas at the very edge of Hanoi’s exclusive economic zone (EEZ)
in the South China Sea.

Under mainstream interpretations of the U.N. Convention on the
Law of the Sea (UNCLOS), Vietnam was well within its rights to do
so. Under China’s idiosyncratic interpretation, it was not. China
has never even put forward a clear claim to that piece of seabed.
On July 25, Chinese Foreign Ministry spokesman Lu Kang would onlyurge “the
relevant party to cease the relevant unilateral infringing
activities” — but without saying what they actually were. In the
absence of official clarity, Chinese lawyers and official think
tanks have suggested two main interpretations.

A
Vietnamese Marine Guard officer monitors a Chinese coast guard
vessel in the South China Sea, about 130 miles offshore of
Vietnam May 15, 2014.REUTERS/Nguyen
Minh

China may be claiming “historic rights” to this part of the sea
on the grounds that it has always been part of the Chinese domain
(something obviously contested by all the other South China Sea
claimants, as well as neutral historians). Alternatively, it may
be claiming that the Spratly Islands — the collection of islets,
reefs, and rocks off the coasts of Vietnam, Malaysia, Brunei, and
the Philippines — are entitled as a group to their own EEZ. An
international arbitration tribunal in The Hague, however, ruled
these claims incompatible with UNCLOS a year ago. China has
refused to recognize both the tribunal and its ruling.

In mid-June, Talisman Vietnam set out to drill a deepwater
“appraisal well” in Block 136-03 on what insiders believe is a
billion-dollar gas field, only 50 miles from an existing Repsol
operation. The Vietnamese government knew there was a risk that
China might try to interfere and sent out coast guard ships and
other apparently civilian vessels to protect the drillship.

At first, China’s intervention was relatively diplomatic. The
vice chairman of the Central Military Commission, Gen. Fan
Changlong, visited Hanoi on June 18 and demanded an end to the
drilling. When Vietnam refused, he cancelled a joint meeting on
border security (the 4th Border Defense Friendly Exchange) and
went home.

Reports from Hanoi (which have been confirmed by similar
reports, from different sources, to the Australia-based
analyst Carlyle Thayer) say that, shortly afterward, the
Vietnamese ambassador in Beijing was summoned to the Chinese
Foreign Ministry and told, bluntly, that unless the drilling
stopped and Vietnam promised never to drill in that part of the
sea ever again, China would take military action against
Vietnamese bases in the South China Sea.

Reuters

This is a dramatic threat, but it is not unprecedented. While
researching my book on the South China Sea, I was told by a
former BP executive that China had made similar threats to that
company when it was operating off the coast of Vietnam in early
2007. Fu Ying, then the Chinese ambassador in London, told BP’s
CEO at the time, Tony Hayward, that she could not guarantee the
safety of BP employees if the company did not abandon its
operations in the South China Sea. BP immediately agreed and over
the following months withdrew from its offshore Vietnam
operations. I asked Fu about this at a dinner in Beijing in 2014,
and she replied, “I did what I did because I have great respect
for BP and did not want it to get into trouble.”

Vietnam occupies around 28 outposts in the Spratly Islands. Some
are established on natural islands, but many are isolated
blockhouses on remote reefs. According to Thayer, 15 are simply
platforms on legs: more like place markers than military
installations. They would be all but impossible to defend from a
serious attack. China demonstrated this with attacks on
Vietnamese positions in the Paracel Islands in 1974 and in a
battle over Johnson South Reef in the Spratlys in 1988. Both
incidents ended with casualties for Vietnam and territorial gains
for China. There are rumors, entirely unconfirmed, that there was
a shooting incident near one of these platforms in June. If true,
this may have been a more serious warning from Beijing to Hanoi.

Meanwhile, the drillship Deepsea Metro I had found
exactly what Repsol was looking for: a handsome discovery —
mainly gas but with some oil. The company thought there could be
more and kept on drilling. It hoped to reach the designated total
depth of the well by the end of July.

An
oil rig, right, that China calls Haiyang Shiyou 981 and Vietnam
refers to as Hai Duong 981, seen in the South China Sea off the
shore of Vietnam, May 14, 2014.Thomson Reuters

Back in Hanoi, the Politburo met to discuss what to do. Low oil
prices and declining production from the country’s existing
offshore fields were hurting the government budget.

The country needed cheap energy to fuel its economic growth and
keep the Communist Party in power — but, at the same time, it was
deeply dependent on trade with China.

It is all but impossible to know for sure how big decisions are
made in Vietnam, but the version apparently told to Repsol was
that the Politburo was deeply split.

Of its 19 members, 17 favored calling China’s bluff. Only two
disagreed, but they were the most influential figures at the
table: the general secretary of the party, Nguyen Phu Trong, and
Defense Minister Ngo Xuan Lich.

After two acrimonious meetings in mid-July, the decision was
made: Vietnam would kowtow to Beijing and end the drilling.
According to the same sources,

The winning argument was that the Trump administration could not
be relied upon to come to Hanoi’s assistance in the event of a
confrontation with China. Reportedly, the mood was rueful.
If Hillary Clinton had been sitting in the White House, Repsol
executives were apparently told, she would have understood the
stakes and everything would have been different.

The faith in Clinton isn’t surprising. Her interventions on
behalf of the Southeast Asian claimant states, starting in Hanoi
at the July 2010
meeting of the ASEAN Regional Forum, are well remembered in
the region. The Barack Obama administration’s focus on the
regional rules-based order was welcomed by
governments fearful of domination by either the United States or
China.

President
Barack Obama, left, meets with Chinese President Xi Jinping at
the Nuclear Security Summit in Washington, March 31,
2016.REUTERS/Kevin
Lamarque

That said, some U.S. observers are skeptical that any other
administration would have been more forthcoming. Bonnie Glaser,
the director of the China Power Project at the Center for
Strategic and International Studies, questions this apparent
contrast: “What would the U.S. have done differently [under
Obama]? I find it unlikely that the U.S. would militarily defend
Vietnam against China. Vietnam isn’t an ally.”

Yet it wouldn’t have taken much: a statement or two about the
rules-based order and the importance of abiding by UNCLOS, some
coincidental naval exercises during the weeks of the drilling,
perhaps even some gunnery practice in the region of Block 136-03
and a few quiet words between Washington and Beijing.
“Forward-deployed diplomacy,” as it used to be called.

President
Donald Trump, right, shakes hands with Chinese President Xi
Jinping during a dinner at Mar-a-Lago, April 6, 2017, in Palm
Beach, Florida.AP Photo/Alex
Brandon

The Obama administration warned
Beijing off the Scarborough Shoal in April 2016 this way. Has
Donald Trump’s Washington forgotten the dark art of deterrence?

The implications of China’s victory are obvious.

Regardless of international law, China is going to set the rules
in the South China Sea. It is going to apply its own version of
history, its own version of “shared” ownership, and it will
dictate who can exploit which resources.

If Vietnam, which has at least the beginnings of a credible naval
deterrent, can be intimidated, then so can every other country in
the region, not least the Philippines.

This month, Manila announced
its intention to drill for the potentially huge gas field that
lies under the Reed Bank in the South China Sea. The desire to
exploit those reserves (before the country’s main gas field at
Malampaya runs out in a few years’ time) was the main reason for
the Philippines to initiate the arbitration proceedings in The
Hague.

The Philippines won a near total legal victory in that case, but
since taking office just over a year ago, President Rodrigo
Duterte has downplayed its importance. He appears to have been
intimidated: preferring to appeal to China for financial aid
rather than assert his country’s maritime claims.

Filipino
activists at an anti-China rally outside the Chinese Consulate at
the financial district of Makati, south of Manila, Philippines,
June 4, 2015.AP Photo/Aaron
Favila

In May, Duterte told an
audience in Manila that Chinese President Xi Jinping had
warned him there would be war if the Philippines tried to exploit
the gas reserves that the Hague tribunal had ruled belonged to
his country. Last week, Chinese Foreign Minister Wang Yi was in
the Philippine capital to discuss “joint
development” of those energy resources.

Where Duterte and the Vietnamese leadership go, others will
follow. Southeast Asian governments have reached one major
conclusion from President Trump’s first six months: The United
States is not prepared to put skin in the game.

What is the point of all those freedom of navigation operations
to maintain UNCLOS if, when push comes to shove, Washington does
not support the countries that are on the receiving end of
Chinese pressure?

A
Chinese Coast Guard ship approaches Filipino fishermen off
Scarborough Shoal in the South China Sea, also called the West
Philippine Sea, September 23, 2015.AP
Photo/Renato Etac

Why has Washington been so inept? Secretary of State Rex
Tillerson knows the stakes well. His former company ExxonMobil is
also investigating a massive gas prospect in disputed waters.

The “Blue Whale” field lies in Block 118, farther north and
closer to Vietnam’s coast than Repsol’s discovery — but also
contested by China.

Like so much else, it’s a mystery whether this is a deliberate
choice by the Trump White House not to get involved in the
details of the disputes or if it is a reflection of the decimation of
the State Department’s capabilities, with so many senior
posts vacant and so many middle-ranking staff leaving.

The most worrying possibility would be that Tillerson failed to
act out of the desire to see his former commercial rival, Repsol,
fail so that his former employer, ExxonMobil, could obtain
greater leverage in the Vietnamese energy market. But what
government would ever trust Tillerson again?

Repsol is currently plugging its highly successful appraisal well
with cement and preparing to sail away from a total investment of
more than $300 million. Reports from the region say a Chinese
seismic survey vessel, the HYSY760, protected by a small
flotilla, is on its way to the same area to examine the prospects
for itself.

UNCLOS has been upended, and the rules-based order has been
diminished. This wasn’t inevitable nor a fait accompli.
If Hanoi thought Washington had its back, China could have been
deterred — and the credibility of the United States in the region
strengthened. Instead, Trump has left the region drifting in the
direction of Beijing.